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If someone is consistently good at losing money 60% of the time. Why not just do the exact opposite of whatever their initial hunch is. Then they should make mo
by samfisher83 10y ago
If someone is consistently good at losing money 60% of the time. Why not just do the exact opposite of whatever their initial hunch is. Then they should make money. Based on loss of 36% from the article that is more than just transaction and trade fees which are 1 to 2%of trade therefore if they just do the opposite of what they are doing they should make money.
- simo7 10y agoExcept that the loss in not calculated on 1 transaction. If you go exactly even before transaction fees, on a big enough number of transaction you loose everything....exactly because of transaction fees.
- tomhschmidt 10y agohttps://en.wikipedia.org/wiki/The_Opposite https://en.wikipedia.org/wiki/The_Opposite
- qntty 10y agoWell I guess the opposite of doing day trading is not doing day trading... it works!
- dietrichepp 10y agoIf you lose money because you don't quite beat the spread, doing the opposite might mean that you just lose money faster. There are also fees, and the enormous risk of taking short positions (the natural opposite of long positions).
- KeytarHero 10y ago> Why not just do the exact opposite of whatever their initial hunch is. If your initial hunch is to buy a stock you don't own yet, you can't sell it instead.
- enraged_camel 10y agoYou buy stocks for two reasons. Either you think they will go up (long) or you think they will go down (called "shorting"). You can think of them as opposites.
- KeytarHero 10y agoBuying short isn't the opposite of buying long - it's the reciprocal. Which is an important distinction: if you buy a diversified portfolio of 10 stocks and one goes bust, if you bought long you've lost 10%. If you bought short, you're completely broke.
- dragonwriter 10y ago> If your initial hunch is to buy a stock you don't own yet, you can't sell it instead. You can (by selling on margin) if you have a margin account.
- dbish 10y agoYou can short it.
- JamesSwift 10y agoWhat is the opposite of buying a specific stock? Buying every single other stock?
- loteck 10y agoIn investing, my understanding is the opposite of a long is a short.
- wstrange 10y agoShorting has asymmetric risk. When you are long your loss is 100%. With a short it is theoretically unlimited.
- dragonwriter 10y ago> Shorting has asymmetric risk. Shorting is perfectly symmetric with longing (except linguistically -- because "shorting" is perfectly normal, but "longing" not): in the former you have unlimited downside risk and limited upside set by the price at which you sold, in the latter you have unlimited upside potential and limited downside set by the price at which you bought.
- jboles 10y agoIsn't this the situation that a margin call is meant to handle -- limiting your losses to the collateral you have on deposit?
- Nicholas_C 10y agoShort selling a stock.
- qznc 10y agoThe opposite is to borrow and then sell it.
- ceejayoz 10y agoThat has a lot more risk. https://en.wikipedia.org/wiki/Short_squeeze https://en.wikipedia.org/wiki/Short_squeeze
- qznc 10y agoIf you don't reach your destination by always turning left, then always turning right should be the winning strategy? This is not about binary decisions. The problem is to pick two points in time: When to buy and when to sell.
- cloudjacker 10y agoThe risk profile changes when you switch to an opposite strategy If you went long, and lost money, going short instead doesn't mean you would make money, it means you could lose on the interest payments, you could lose on being forced to close, could lose on the different risk profile of having unlimited loss potential Even more so with derivatives.
- samfisher83 10y agoThere are borrowing costs with shorting, but you usually don't go long on shorting stocks its more of short term thing. In that case borrowing costs are not too bad.
- randartie 10y agoYou can't just flip all your decisions because that would only work if your decisions are inversely correlated to the right decision. Losing traders are usually completely uncorrelated.